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Employer  >  Trustee Zone  >  OPS Matters  >  Key PPF deadlines and changes to levy calculation

Key PPF deadlines and changes to levy calculation

Deadlines crop up every day whether as part of the trustees' responsibilities of running a pension scheme or in relation to the company's business plan. There are some key dates looming associated with the Pension Protection Fund (PPF) which trustees and employers will need to fulfil voluntarily and by law.

Key dates

1. By law, every scheme must have submitted a section 179 valuation to the Pensions Regulator (TPR) by 31 March 2008. Failure to do so will result in penalties.

2. To calculate the levy, the PPF uses data held by TPR. If TPR holds data on its records which is inaccurate then any online amendments need to be completed by 31 March 2008. Unlike previous years, there'll be no opportunity to amend incorrect data, thus influencing levy calculations, after this date.

3. Any amendments to the sponsoring employer's Dun & Bradstreet risk rating must be in place by 31 March 2008. This is important as it'll be used to calculate the levy in 2008/09 and 2009/10.

4. For contingent assets to be recognised for the 2008/09 levy calculation new certificates (or re-certifications of existing contingent assets) must be submitted by midnight on 31 March 2008.

5. Actuarial certificates of deficit reduction contributuions and block transfer certificates must be submitted by midnight on 7 April 2008.

Calculation changes

Not only are there deadlines to contend with but the PPF has decided to change how it calculates the levy.  On the face of it, nothing appears to be changing as the PPF intends to collect £675m, the same as last year and collect this same amount in 2009/10 and 2010/11 (subject to earnings indexation and there being no change in risk faced by the PPF).

One of the main changes is to the Risk Based Levy (RBL) which makes up 80% of the total levy. Previously, if scheme funding exceeded 104% schemes could expect a reduction in the RBL with the better funded schemes receiving greater reductions. If funding levels exceeded 125% there would be no RBL to pay.

For 2008/09, these figures will increase to 120% and 140%. The PPF say that this will more fairly reflect the long term risk that schemes pose to the PPF and also encourage better funding. However this could be bad news for schemes that have taken steps to improve scheme funding up to the previous levels of between 104 and 125%. And whether employers can afford to increase their funding level is an unknown. 

The PPF has prepared a document summarising all the changes to the calculations.  

Who can I contact for more info?

The PPF has a contacts page with all the key contact telephone numbers, e-mail and web addresses should trustees and employers need help or guidance. 

...and finally

As you can see, there's a lot to do. Trustees and employers may be feeling overwhelmed however the scheme Actuary will likely have this all in hand. But time is running out, there's only 31 days left for action to be taken to reduce the scheme's levy payment, so if you're aware that the scheme Actuary hasn't recently been in touch you may want to raise these issues with them.